A TECHNICAL THOUGHT

The IT giant is seeding the digital Great Renaissance.

Recently, technology has been dull.

We're still fascinated by processing speeds. Wearables are no longer an engineer's dream.

Apple has been quiet and avoided huge announcements. Slowness speaks something. Everything in the spaceship HQ seems to be turning slowly, unlike competitors around buzzwords.

Is this a sign of the impending storm?

Metas stock has fallen while Google milks dumb people. Microsoft steals money from corporations and annexes platforms like Linkedin.

Just surface bubbles?

Is Apple, one of the technology continents, pushing against all others to create a paradigm shift?

The fundamental human right to privacy

Apple's unusual remarks emphasize privacy. They incorporate it into their business models and judgments.

Apple believes privacy is a human right. There are no compromises.

This makes it hard for other participants to gain Apple's ecosystem's efficiencies.

Other players without hardware platforms lose.

Apple delivers new kidneys without rejection, unlike other software vendors. Nothing compromises your privacy.

Corporate citizenship will become more popular.

Apples have full coffers. They've started using that flow to better communities, which is great.

Apple's $2.5B home investment is one example. Google and Facebook are building or proposing to build workforce housing.

Apple's funding helps marginalized populations in more than 25 California counties, not just Apple employees.

Is this a trend, and does Apple keep giving back? Hope so.

I'm not cynical enough to suspect these investments have malicious motives.

The last frontier is the environment.

Climate change is a battle-to-win.

Long-term winners will be companies that protect the environment, turning climate change dystopia into sustainable growth.

Apple has been quietly changing its supply chain to be carbon-neutral by 2030.

“Apple is dedicated to protecting the planet we all share with solutions that are supporting the communities where we work.” Lisa Jackson, Apple’s vice president of environment.

Apple's $4.7 billion Green Bond investment will produce 1.2 gigawatts of green energy for the corporation and US communities. Apple invests $2.2 billion in Europe's green energy. In the Philippines, Thailand, Nigeria, Vietnam, Colombia, Israel, and South Africa, solar installations are helping communities obtain sustainable energy.

Apple is already carbon neutral today for its global corporate operations, and this new commitment means that by 2030, every Apple device sold will have net zero climate impact. -Apple.

Apple invests in green energy and forests to reduce its paper footprint in China and the US. Apple and the Conservation Fund are safeguarding 36,000 acres of US working forest, according to GreenBiz.

Apple's packaging paper is recycled or from sustainably managed forests.

What matters is the scale.

$1 billion is a rounding error for Apple.

These small investments originate from a tree with deep, spreading roots.

Apple's genes are anchored in building the finest products possible to improve consumers' lives.

I felt it when I switched to my iPhone while waiting for a train and had to pack my Macbook. iOS 16 dictation makes writing more enjoyable. Small change boosts productivity. Smooth transition from laptop to small screen and dictation.

Apples' tiny, well-planned steps have great growth potential for all consumers in everything they do.

There is clearly disruption, but it doesn't have to be violent

Digital channels, methods, and technologies have globalized human consciousness. One person's responsibility affects many.

Apple gives us tools to be privately connected. These technologies foster creativity, innovation, fulfillment, and safety.

Apple has invented a mountain of technologies, services, and channels to assist us adapt to the good future or combat evil forces who cynically aim to control us and ruin the environment and communities. Apple has quietly disrupted sectors for decades.

Google, Microsoft, and Meta, among others, should ride this wave. It's a tsunami, but it doesn't have to be devastating if we care, share, and cooperate with political decision-makers and community leaders worldwide.

A fresh Renaissance

Renaissance geniuses Michelangelo and Da Vinci. Different but seeing something no one else could yet see. Both were talented in many areas and could discover art in science and science in art.

These geniuses exemplified a period that changed humanity for the better. They created, used, and applied new, valuable things. It lives on.

Apple is a digital genius orchard. Wozniak and Jobs offered us fertile ground for the digital renaissance. We'll build on their legacy.

We may put our seeds there and see them bloom despite corporate greed and political ignorance.

I think the coming tsunami will illuminate our planet like the Renaissance.

Why breakthrough technologies must be accessible

ChatGPT has exploded. Over 1 million people have used the app, and coding sites like Stack Overflow have banned its answers. It's huge.

I wouldn't have called that as an AI researcher. ChatGPT uses the same GPT-3 technology that's been around for over two years.

More than impressive technology, ChatGPT 3 shows how access makes breakthroughs usable. OpenAI has finally made people realize the power of AI by packaging GPT-3 for normal users.

We think of Thomas Edison as the inventor of the lightbulb, not because he invented it, but because he popularized it.

Going forward, AI companies that make using AI easy will thrive.

Use-case importance

Most modern AI systems use massive language models. These language models are trained on 6,000+ years of human text.

GPT-3 ate 8 billion pages, almost every book, and Wikipedia. It created an AI that can write sea shanties and solve coding problems.

Nothing new. I began beta testing GPT-3 in 2020, but the system's basics date back further.

Tools like GPT-3 are hidden in many apps. Many of the AI writing assistants on this platform are just wrappers around GPT-3.

Lots of online utilitarian text, like restaurant menu summaries or city guides, is written by AI systems like GPT-3. You've probably read GPT-3 without knowing it.

Accessibility

Why is ChatGPT so popular if the technology is old?

ChatGPT makes the technology accessible. Free to use, people can sign up and text with the chatbot daily. ChatGPT isn't revolutionary. It does it in a way normal people can access and be amazed by.

Accessibility isn't easy. OpenAI's Sam Altman tweeted that opening ChatGPT to the public increased computing costs.

Each chat costs "low-digit cents" to process. OpenAI probably spends several hundred thousand dollars a day to keep ChatGPT running, with no immediate business case.

Academic researchers and others who developed GPT-3 couldn't afford it. Without resources to make technology accessible, it can't be used.

Retrospective

This dynamic is old. In the history of science, a researcher with a breakthrough idea was often overshadowed by an entrepreneur or visionary who made it accessible to the public.

We think of Thomas Edison as the inventor of the lightbulb. But really, Vasilij Petrov, Thomas Wright, and Joseph Swan invented the lightbulb. Edison made technology visible and accessible by electrifying public buildings, building power plants, and wiring.

Edison probably lost a ton of money on stunts like building a power plant to light JP Morgan's home, the NYSE, and several newspaper headquarters.

People wanted electric lights once they saw their benefits. By making the technology accessible and visible, Edison unlocked a hugely profitable market.

Similar things are happening in AI. ChatGPT shows that developing breakthrough technology in the lab or on B2B servers won't change the culture.

AI must engage people's imaginations to become mainstream. Before the tech impacts the world, people must play with it and see its revolutionary power.

As the field evolves, companies that make the technology widely available, even at great cost, will succeed.

OpenAI's compute fees are eye-watering. Revolutions are costly.

Dark Web activity? Is it as horrible as they say?

We peruse our phones for hours. Internet has improved our worldview.

However, the world's harshest realities remain buried on the internet and unattainable by everyone.

Browsers cannot access the Dark Web. Browse it with high-security authentication and exclusive access. There are compelling reasons to avoid the dark web at all costs.

1. The Dark Web and I

Darius wrote My Dark Web Story on reddit two years ago. The user claimed to have shared his dark web experience. DaRealEddyYT wanted to surf the dark web after hearing several stories.

He curiously downloaded Tor Browser, which provides anonymity and security.

In the Dark Room, bound

As Darius logged in, a text popped up: “Want a surprise? Click on this link.”

The link opened to a room with a chair. Only one light source illuminated the room. The chair held a female tied.

As the screen read "Let the game begin," a man entered the room and was paid in bitcoins to torment the girl.

The man dragged and tortured the woman.

A danger to safety

Leaving so soon, Darius, disgusted Darius tried to leave the stream. The anonymous user then sent Darius his personal information, including his address, which frightened him because he didn't know Tor was insecure.

After deleting the app, his phone camera was compromised.

He also stated that he left his residence and returned to find it unlocked and a letter saying, Thought we wouldn't find you? Reddit never updated the story.

The story may have been a fake, but a much scarier true story about the dark side of the internet exists.

2. The Silk Road Market

The dark web is restricted for a reason. The dark web has everything illicit imaginable. It's awful central.

The dark web has everything, from organ sales to drug trafficking to money laundering to human trafficking. Illegal drugs, pirated software, credit card, bank, and personal information can be found in seconds.

The dark web has reserved websites like Google. The Silk Road Website, which operated from 2011 to 2013, was a leading digital black market.

The FBI grew obsessed with site founder and processor Ross William Ulbricht.

The site became a criminal organization as money laundering and black enterprises increased. Bitcoin was utilized for credit card payment.

The FBI was close to arresting the site's administrator. Ross was detained after the agency closed Silk Road in 2013.

Two years later, in 2015, he was convicted and sentenced to two consecutive life terms and forty years. He appealed in 2016 but was denied, thus he is currently serving time.

The hefty sentence was for more than running a black marketing site. He was also convicted of murder-for-hire, earning about $730,000 in a short time.

3. Person-buying auctions

Bidding on individuals is another weird internet activity. After a Milan photo shoot, 20-year-old British model Chloe Ayling was kidnapped.

An ad agency in Milan made a bogus offer to shoot with the mother of a two-year-old boy. Four men gave her anesthetic and put her in a duffel bag when she arrived.

She was held captive for several days, and her images and $300,000 price were posted on the dark web. Black Death Trafficking Group kidnapped her to sell her for sex.

She was told two black death foot warriors abducted her. The captors released her when they found she was a mother because mothers were less desirable to sex slave buyers.

In July 2018, Lukasz Pawel Herba was arrested and sentenced to 16 years and nine months in prison. Being a young mother saved Chloe from creepy bidding.

However, it exceeds expectations of how many more would be in such danger daily without their knowledge.

4. Organ sales

Many are unaware of dark web organ sales. Patients who cannot acquire organs often turn to dark web brokers.

Brokers handle all transactions between donors and customers.

Bitcoins are used for dark web transactions, and the Tor server permits personal data on the web.

The WHO reports approximately 10,000 unlawful organ transplants annually. The black web sells kidneys, hearts, even eyes.

To protect our lives and privacy, we should manage our curiosity and never look up dangerous stuff.

While it's fascinating and appealing to know what's going on in the world we don't know about, it's best to prioritize our well-being because one never knows how bad it might get.

Sources

Reddit.com

The Daily Beast

PYMNTS

Commons.erau.edu

The Sun

Investopedia

Startup Talky

Sam Bankman Fried (SDBF) is a legendary con man. But the NYT might not tell you that...

Since SBF's empire was revealed to be a lie, mainstream news organizations and commentators have failed to give readers a straightforward assessment. The New York Times and Wall Street Journal have uncovered many key facts about the scandal, but they have also soft-peddled Bankman-Fried's intent and culpability.

It's clear that the FTX crypto exchange and Alameda Research committed fraud to steal money from users and investors. That’s why a recent New York Times interview was widely derided for seeming to frame FTX’s collapse as the result of mismanagement rather than malfeasance. A Wall Street Journal article lamented FTX's loss of charitable donations, bolstering Bankman's philanthropic pose. Matthew Yglesias, court chronicler of the neoliberal status quo, seemed to whitewash his own entanglements by crediting SBF's money with helping Democrats in 2020 – sidestepping the likelihood that the money was embezzled.

Many outlets have called what happened to FTX a "bank run" or a "run on deposits," but Bankman-Fried insists the company was overleveraged and disorganized. Both attempts to frame the fallout obscure the core issue: customer funds misused.

Because banks lend customer funds to generate returns, they can experience "bank runs." If everyone withdraws at once, they can experience a short-term cash crunch but there won't be a long-term problem.

Crypto exchanges like FTX aren't banks. They don't do bank-style lending, so a withdrawal surge shouldn't strain liquidity. FTX promised customers it wouldn't lend or use their crypto.

Alameda's balance sheet blurs SBF's crypto empire.

The funds were sent to Alameda Research, where they were apparently gambled away. This is massive theft. According to a bankruptcy document, up to 1 million customers could be affected.

In less than a month, reporting and the bankruptcy process have uncovered a laundry list of decisions and practices that would constitute financial fraud if FTX had been a U.S.-regulated entity, even without crypto-specific rules. These ploys may be litigated in U.S. courts if they enabled the theft of American property.

The list is very, very long.

The many crimes of Sam Bankman-Fried and FTX

At the heart of SBF's fraud are the deep and (literally) intimate ties between FTX and Alameda Research, a hedge fund he co-founded. An exchange makes money from transaction fees on user assets, but Alameda trades and invests its own funds.

Bankman-Fried called FTX and Alameda "wholly separate" and resigned as Alameda's CEO in 2019. The two operations were closely linked. Bankman-Fried and Alameda CEO Caroline Ellison were romantically linked.

These circumstances enabled SBF's sin.  Within days of FTX's first signs of weakness, it was clear the exchange was funneling customer assets to Alameda for trading, lending, and investing. Reuters reported on Nov. 12 that FTX sent $10 billion to Alameda. As much as $2 billion was believed to have disappeared after being sent to Alameda. Now the losses look worse.

It's unclear why those funds were sent to Alameda or when Bankman-Fried betrayed his depositors. On-chain analysis shows most FTX to Alameda transfers occurred in late 2021, and bankruptcy filings show both lost $3.7 billion in 2021.

SBF's companies lost millions before the 2022 crypto bear market. They may have stolen funds before Terra and Three Arrows Capital, which killed many leveraged crypto players.

FTT loans and prints

CoinDesk's report on Alameda's FTT holdings ignited FTX and Alameda Research. FTX created this instrument, but only a small portion was traded publicly; FTX and Alameda held the rest. These holdings were illiquid, meaning they couldn't be sold at market price. Bankman-Fried valued its stock at the fictitious price.

FTT tokens were reportedly used as collateral for loans, including FTX loans to Alameda. Close ties between FTX and Alameda made the FTT token harder or more expensive to use as collateral, reducing the risk to customer funds.

This use of an internal asset as collateral for loans between clandestinely related entities is similar to Enron's 1990s accounting fraud. These executives served 12 years in prison.

Alameda's margin liquidation exemption

Alameda Research had a "secret exemption" from FTX's liquidation and margin trading rules, according to legal filings by FTX's new CEO.

FTX, like other crypto platforms and some equity or commodity services, offered "margin" or loans for trades. These loans are usually collateralized, meaning borrowers put up other funds or assets. If a margin trade loses enough money, the exchange will sell the user's collateral to pay off the initial loan.

Keeping asset markets solvent requires liquidating bad margin positions. Exempting Alameda would give it huge advantages while exposing other FTX users to hidden risks. Alameda could have kept losing positions open while closing out competitors. Alameda could lose more on FTX than it could pay back, leaving a hole in customer funds.

The exemption is criminal in multiple ways. FTX was fraudulently marketed overall. Instead of a level playing field, there were many customers.

Above them all, with shotgun poised, was Alameda Research.

Alameda front-running FTX listings

Argus says there's circumstantial evidence that Alameda Research had insider knowledge of FTX's token listing plans. Alameda was able to buy large amounts of tokens before the listing and sell them after the price bump.

If true, these claims would be the most brazenly illegal of Alameda and FTX's alleged shenanigans. Even if the tokens aren't formally classified as securities, insider trading laws may apply.

In a similar case this year, an OpenSea employee was charged with wire fraud for allegedly insider trading. This employee faces 20 years in prison for front-running monkey JPEGs.

Huge loans to executives

Alameda Research reportedly lent FTX executives $4.1 billion, including massive personal loans. Bankman-Fried received $1 billion in personal loans and $2.3 billion for an entity he controlled, Paper Bird. Nishad Singh, director of engineering, was given $543 million, and FTX Digital Markets co-CEO Ryan Salame received $55 million.

FTX has more smoking guns than a Texas shooting range, but this one is the smoking bazooka – a sign of criminal intent. It's unclear how most of the personal loans were used, but liquidators will have to recoup the money.

The loans to Paper Bird were even more worrisome because they created another related third party to shuffle assets. Forbes speculates that some Paper Bird funds went to buy Binance's FTX stake, and Paper Bird committed hundreds of millions to outside investments.

FTX Inner Circle: Who's Who

That included many FTX-backed VC funds. Time will tell if this financial incest was criminal fraud. It fits Bankman-pattern Fried's of using secret flows, leverage, and funny money to inflate asset prices.

FTT or loan 'bailouts'

Also. As the crypto bear market continued in 2022, Bankman-Fried proposed bailouts for bankrupt crypto lenders BlockFi and Voyager Digital. CoinDesk was among those deceived, welcoming SBF as a J.P. Morgan-style sector backstop.

In a now-infamous interview with CNBC's "Squawk Box," Bankman-Fried referred to these decisions as bets that may or may not pay off.

But maybe not. Bloomberg's Matt Levine speculated that FTX backed BlockFi with FTT money. This Monopoly bailout may have been intended to hide FTX and Alameda liabilities that would have been exposed if BlockFi went bankrupt sooner. This ploy has no name, but it echoes other corporate frauds.

Secret bank purchase

Alameda Research invested $11.5 million in the tiny Farmington State Bank, doubling its net worth. As a non-U.S. entity and an investment firm, Alameda should have cleared regulatory hurdles before acquiring a U.S. bank.

In the context of FTX, the bank's stake becomes "ominous." Alameda and FTX could have done more shenanigans with bank control. Compare this to the Bank for Credit and Commerce International's failed attempts to buy U.S. banks. BCCI was even nefarious than FTX and wanted to buy U.S. banks to expand its money-laundering empire.

The mainstream's mistakes

These are complex and nuanced forms of fraud that echo traditional finance models. This obscurity helped Bankman-Fried masquerade as an honest player and likely kept coverage soft after the collapse.

Bankman-Fried had a scruffy, nerdy image, like Mark Zuckerberg and Adam Neumann. In interviews, he spoke nonsense about an industry full of jargon and complicated tech. Strategic donations and insincere ideological statements helped him gain political and social influence.

SBF' s'Effective' Altruism Blew Up FTX

Bankman-Fried has continued to muddy the waters with disingenuous letters, statements, interviews, and tweets since his con collapsed. He's tried to portray himself as a well-intentioned but naive kid who made some mistakes. This is a softer, more pernicious version of what Trump learned from mob lawyer Roy Cohn. Bankman-Fried doesn't "deny, deny, deny" but "confuse, evade, distort."

It's mostly worked. Kevin O'Leary, who plays an investor on "Shark Tank," repeats Bankman-SBF's counterfactuals.  O'Leary called Bankman-Fried a "savant" and "probably one of the most accomplished crypto traders in the world" in a Nov. 27 interview with Business Insider, despite recent data indicating immense trading losses even when times were good.

O'Leary's status as an FTX investor and former paid spokesperson explains his continued affection for Bankman-Fried despite contradictory evidence. He's not the only one promoting Bankman-Fried. The disgraced son of two Stanford law professors will defend himself at Wednesday's DealBook Summit.

SBF's fraud and theft rival those of Bernie Madoff and Jho Low. Whether intentionally or through malign ineptitude, the fraud echoes Worldcom and Enron.

The Perverse Impacts of Anti-Money-Laundering

The principals in all of those scandals wound up either sentenced to prison or on the run from the law. Sam Bankman-Fried clearly deserves to share their fate.

Read the full article here.

Or the “lie to me” method.

I can predict a startup's success in minutes.

Just interview its founder.

Ask "why?"

I question "why" till I sense him.

I need to feel the person I have in front of me. I need to know if he or she can deliver. Startups aren't easy. Without abilities, a brilliant idea will fail.

Good entrepreneurs have these qualities: He's a leader, determined, and resilient.

For me, they can be split in two categories.

The first entrepreneur aspires to live meaningfully. The second wants to get rich. The second is communicative. He wants to wow the crowd. He's motivated by the thought of one day sailing a boat past palm trees and sunny beaches.

What drives the first entrepreneur is evident in his speech, face, and voice. He will not speak about his product. He's (nearly) uninterested. He's not selling anything. He's not a salesman. He wants to succeed. The product is his fuel.

He'll explain his decision. He'll share his motivations. His desire. And he'll use meaningful words.

Paul Ekman has shown that face expressions aren't cultural. His study influenced the American TV series "lie to me" about body language and speech.

Passionate entrepreneurs are obvious. It's palpable. Faking passion is tough. Someone who wants your favor and money will expose his actual motives through his expressions and language.

The good liar will be able to fool you for a while, but not for long if you pay attention to his body language and how he expresses himself.

And also, if you look at his business plan.

His business plan reveals his goals. Read between the lines.

Entrepreneur 1 will focus on his "why", whereas Entrepreneur 2 will focus on the "how".

Entrepreneur 1 will develop a vision-driven culture.

The second, on the other hand, will focus on his EBITDA.

Why is the culture so critical? Because it will allow entrepreneur 1 to develop a solid team that can tackle his problems and trials. His team's "why" will keep them together in tough times.

"Give me a terrific start-up team with a mediocre idea over a weak one any day." Because a great team knows when to pivot and trusts each other. Weak teams fail.” — Bernhard Schroeder

Closings thoughts

Every VC must ask Why. Entrepreneur's motivations. This "why" will create the team's culture. This culture will help the team adjust to any setback.